Softonic

WACC Calculator

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Enter market values of common equity and interest-bearing debt, their required returns and the tax rate to estimate a two-component weighted average cost of capital.

Formula and interpretation

The tool calculates WACC = E/(D+E) × Re + D/(D+E) × Rd × (1−T). It uses market-value weights and an after-tax cost of debt, consistent with Aswath Damodaran’s NYU definition. Debt and equity cannot both be zero.

Use costs and cash flows with matching currency, timing and nominal/real basis. This simplified version includes common equity and debt only: it does not model preferred stock, leases, issuance fees, changing capital structure or project-specific risk. WACC is an estimate, not investment advice or an automatic hurdle rate for every project. Inputs are sent to the site and may appear in the URL.

Frequently Asked Questions

Use current market values where available; book values can produce different and outdated weights.

It represents the simplified tax shield from deductible interest. Actual tax benefits can differ.

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